Friday, April 13, 2012

When Did Scientific Political Economy Start?

Johnathan Schlefer writes, "There is no invisible hand". He bases his claim on empirical observation and the Sonnenschein-Mantel-Debreu results and other investigations into the stability of general equilibrium. Some find amusing the ignorance and stupidity in the comments.

He also brings up Adam Smith's failure to support propertarian dogma. Gavin Kennedy mostly endorses Schlefer's view of Smith.

Which brings me to my question. Suppose you accept the distinctionbetween scientific political economy and vulgar political economy. Some see both types of political economy in Adam Smith. He contains both esoteric and exoteric elements. But who would you say was the first writer on scientific political economy? I think you can find scientific elements in Quesnay. After all the study of schemes of expanded reproduction builds on Quesnay's Tableau. Maybe William Petty is the answer to my question. Or maybe one should go back all the way to Aristotle.

10 comments:

absolutely not. The myth making around Adam Smith has been amazing. What's most incredible is that it's largely by his own doing. He popularized the phrase "Mercantilism" and applied it to centuries of writers, attacked the people from centuries ago and then declared all of them unworthy thinkers. It's one of the best smear jobs ever done. At the very least, James Steuart and Josiah Tucker deserve to make the list.

Contemporary assignments of titles like "Father of economics" are mote tiresome than helpful. Ideas evolve; few incidents of someone : "fathering", "grand fathering", "founding" political economy stand up to scrutiny. These often append themselves to Adam Smith; it was not a title he claimed, and they have more to do with US academe's obsession with crowning its version of Adam Smith to give "authority" to their mythical image of the person and the attributions of meaning to the IH metaphor.

I did not mean to imply that Jonathan was completely right; I said he was mostly right, a) regarding the myth of the 'Invisible hand", and b) his account of the background to GE theory's relevance to a modern economy.

Nathan Tankus may be misled about the origins and use of the word "mercantilism". It is from translations from the German word into English long after Smith died in 1790. It did not exist in English in Smith's day.

For example, Eli F. Heckscher's, monumental 2-volume study, "Mercantilism" published in Swedish in 1931, was translated into German in 1935, and then translated into English in 1955. From thence, mercantilism spread across economists in the USA and in into other languages beside Swedish and German.

Adam Smith referred to "mercantile political economy" in Wealth Of Nations, never mercantilism.He critised the views of those preaching mercantile political economy, not the people personally.

Gavin, would you say Smith first grouped the mercantilist pamphleteers together?

I take Nathaniel's point about the concept of the surplus. From secondary literature, I understand that Petty introduced the distinction between market and natural prices. One can read the distinction between value in use and value in exchange into a passage in Aristotle's Politics. I understand why nowadays that de-contextualized history is not considered good scholarship.

As I recall, Schumpeter depicts Smith as building on a century of thought. I think Schumpeter's view supports Nathan's comment.

The Physiocrats' productive, unproductive distinction was between agriculture and non-agriculture, distinct from Smith's between output that adds to revenue and output that does not produce a revenue, though Smith's examples can be misleading. Output from defence expenditure does not earn a revenue, but output from suppliers of defence output for sale to the government doers produce a revenue for the defence manufacturers, as do the inputs sold by suppliers to Inns, hotels, theatres and puppeteers, if not for consumers.

Schumpeter on Smith 'building on centuries' of thought by predecessors, there is no quarrel. That is true of science generally (Newton's 'standing on the shoulders of giants' etc.). Some people, not me, are suspicious of the role of Schumpeter's widow, who edited his manuscript on the History of Economics for publication.

@Gavin: I was sloppy, thanks for correcting me. He used the term "mercantile system" not "mercantilism" (and occasionally "mercantile ideas). That is my mistake.

I would like to defend my larger thesis however. He does criticize Thomas Mun, a writer from over a century before hand. His was an assassination by neglect. he refused to criticize his contemporaries (even though steuart was not only from the same country, the same town but even the same political economy club!)

He even says that some Spanish Cattle Farmers have a better understanding of the nature of value then Mercantile writers do!

In explaining your wider proposition, I can see a possible explanation. It was not considered polite in mid-18th century to criticise living persons by name in published works. The usual form was to refer to so and so as "s------t", etc., if you referred to them by name at all in public printed format.

Smith did refer to 'James Stewarts' [sic] book in a letter to William Pulteney, 3 September, 1772, in reference also to Adam Ferguson: "I have the same opinion of Sir James Stewarts book that you have. Without mentioning it, I flatter myself, that every false principle in it, will meet with a clear and distinct confutation in mine" (Correspondence of Adam Smith, Oxford University Press, 1987, p 164).

Smith refers to Sir James Steuart's, "Inquiry into the Principles of Political Economy", edited and introduced by Andrew Skinner, 1966, Chicago and Oliver Boyd, Edinburgh and to his manuscript of Wealth Of Nations, nearing completion in 1772 (he finished it in 1773; it was published in 1776, after various delays by Smith in London.

Smith has been criticised by modern scholars, I suspect largely because they are unaware of the mannerly norms in print in Smith's lifetime; similarly with what we regard as due care to references to the literature. They were more open - even indiscrete - in personal correspondence!

That doesn't however, excuse his misrepresentation of the mercantile ideas. He deliberately implied that the pamphleteers he criticized as exposing the "mercantile system" (including mun for not understanding the difference between gold and wealth. it was a smear of the worst kind-and it's one of the most effective smears in history.